The mainland's capital investment in factories, property and public facilities in urban areas grew 24.3 per cent year on year in the first two months of the year, even as disastrous snowstorms disrupted general business. In the light of that growth, economists expect Beijing to continue its tightening measures because the problems of an overheating economy seem more acute than a slowdown brought on by the United States credit crunch. For January and February, urban fixed-asset investment totalled 812.1 billion yuan (HK$891.7 billion), the National Bureau of Statistics said yesterday. The growth rate, although lower than the 25.8 per cent increase for all of last year, was still strong, given that 21 of 31 provinces were hit by the crippling blizzards. Fixed-asset investment, a major economic engine, has been rising by more than 20 per cent a year since 2003, despite Beijing's repeated attempts to cool it down. Meanwhile, the mainland's inflation rate hit an 11-year high of 8.7 per cent last month. Moody's Economy.com economist Tang Sumei said fixed-asset investment growth slowed slightly in the period, reflecting the Lunar New Year holiday and the snowstorms. 'Investment remained strong, suggesting China will continue its robust economic expansion going forward,' Ms Tang said. In urban areas in the first two months, coal investment jumped 31 per cent year on year after rising 24 per cent last year. Spending on non-metal minerals surged 61 per cent after expanding 51 per cent last year. Investment in oil and natural gas rose 9.8 per cent after a 22 per cent increase last year. Spending on electricity production fell 3.7 per cent after climbing 8.7 per cent last year. Property development investment increased 32.9 per cent year on year to 237.4 billion yuan, outpacing its 30.2 per cent growth for last year. Spending in the agriculture sector surged 77 per cent to 5.4 billion yuan. The industrial sector rose 26.1 per cent to 335 billion yuan and the service sector increased 22.6 per cent to 471.7 billion yuan. Zhao Xijun, an associate dean of Renmin University's School of Finance, said the real estate figure demonstrated the ineffectiveness of the government's measures targeting the red-hot property market. 'Fixed asset investments may increase further with the money spent on the post-disaster reconstruction,' Professor Zhao said. 'After the National People's Congress concludes, new officials taking office will also lead to the rise, if history is any guide.' Monthly urban investment growth started to soar after the last round of local government reshuffles in 2003, surging to as high as 53 per cent in February 2004. The mainland still risked overheating because fixed asset investment might rebound this year, National Development and Reform Commission head Ma Kai said last week. Despite Beijing's vows to tighten bank lending, central bank data shows that 1.05 trillion yuan of new loans was made in January and last month, already accounting for 29 per cent of the annual quota of 3.6 trillion yuan. In a research note, Liang Hong and Yu Song of Goldman Sachs said the growth momentum was consistent with the mainland's strong import data. Last month, imports rose 35.1 per cent year on year, driven by domestic thirst for commodities, including crude oil, iron ore and soyabeans, while exports edged up 6.5 per cent, reflecting slowing US demand.